Shortage of supply pushing up house prices in Ireland

Taylor Scott International News

A nationwide supply shortage has fuelled a rise of over 2% in the price of the average house in the last three months in Ireland. The majority of counties in the country recorded price increases in the second quarter of 2016 with a lack of supply exacerbated by would be commuters moving further from Dublin as they look for more affordable homes. The Real Estate Alliance Average House Price Survey shows that the average three bed semi-detached home nationally now costs €195,361, an increase of over €4,000 or 2.18% since the end of March and up 4.49% compared to the same time last year. ‘We are seeing firms who are in business for 50 years who have never experienced such a low level of supply, and this is responsible for causing sharp increases in prices in some areas over the past three months,’ said REA chairman Michael O’Connor. While prices in Dublin city and county grew by 1.4% to €363,333 since March, competition for scarce housing below the Central Bank’s €220,000 deposit limit in both the inner and outer commuter areas is fuelling an inflationary market. Prices in the commuter counties of Cork and Galway have risen by €5,000 to €214,588, a rise of 2.4%, while those in the rest of the country have increased by over €3,000 to €128,768 or 2.75%. Three bed semi prices in Kilkenny city rose by €20,000 or 12.5% in the past three months, a figure that is entirely driven by record low supply, according to Michael Boyd of REA Boyds. ‘Our analysis of the Price Register tells us that there are 15 less units per month selling in the county than this time last year and that this is the lowest level since these records began,’ he said. ‘We are finding that demand is strong, mainly from loan approved returned emigrants or Eastern European buyers. We desperately need new building to start, especially as prices for quality stock are now well into viable levels for builders to commence,’ he added. The survey also shows that as the flight to another of the outer commuter counties continues, prices in Laois have risen by €10,000 or 8% in the past three months while prices in Kildare have remained static at €242,500 in the four main towns, due to a low supply of suitable housing stock, combined with a relatively higher price to neighbouring counties. In contrast, Meath has now broken the €200,000 barrier at €201,250 following a 3.21% growth in three months, as Dublin based commuters move out to houses they can afford under the Central Bank’s deposit guidelines. In Wicklow, prices in Blessington have risen from €240,000 to €265,000 in a three month period, a rise of 10.42%, with agent REA Murphys advising that there is a bubble in the three bed semi market. Prices in the county as a whole have gone up by 4.44% to €235,000 over the past three months. Louth continues to act as a microcosm of… Taylor Scott International

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